Welcome to the last official “DRIVE THRU” blog of 2018. I will do a few teasers based upon what is coming in 2019 between now and the next official “DRIVE THRU” on the 12thJanuary 2019, plus I will provide a quick year end performance summary towards the end of the month as I close down the 2018 performance results.
I am trying my best not to wander too far away from Forex in this blog and use this opening piece as my opportunity to SOAPBOX my thoughts, hopefully this helps vis-à-vis my FUNDAMENTAL longer-term thoughts to the FX markets. So, if you think I am getting too political, let me tell you I am holding back and tempering my thoughts and views and offer my apologies if I occasionally step over a line. I am trying my best not to.
Over this past week I was glued to SKY news on the TV and also the parliament.tv web feed on my iPAD and trading screens to follow the BREXIT news first hand. I will remain so into next week. I must say I have found the past few days both fascinating and disturbing.
After hours of watching and listening to the MP’s in the UK House of Commons, I have become increasingly concerned over the way that partisan politics now seems to rule the western world’s economies. The “nation’s best interests”, quite frankly with views of some extreme politicians are simply not on the agenda. It is deeply concerning given what is at stake.
On December 6thwatching the UK House of Commons feed, I heard the following from a Conservative MP that, for me, summed up everything to do with BREXIT perfectly.
BY THIS HOUSE...
BREXIT HAS BEEN SEEN AS A PROBLEM TO MANAGE
AN OPPORTUNITY TO BE SEIZED (SEEN)
(John Baron, Conservative MP (Basildon / Billericay) 6thDecember 2018)
I have never heard of this MP, but a good friend of mine and his family are constituents, he seemed to offer in his statement a quite well thought reasoning to how parliament had failed the electorate.
Yet it is these people (MP’s) who having heard what the UK electorate wanted are now interpreting what they believe to be what the people wanted, BUT, without any cohesion, forward thinking or putting the interests of the UK first. It does appear that the “HOUSE” is united in one thing, that is, on voting Theresa May’s BREXIT deal down. BUT; in favour of what as an alternative?
- The Labour Party has no clear alternative and frankly when you look at their front bench, if they ever assumed power in the UK, the cable reaction would be worse than any Mark Carney (BOE) worst case scenario.
- The SNP complains about not being allowed to stay in the EU. Yet many MP’s believe that is what Theresa May’s BREXIT deal amounts to.... but they are STILL not happy.
- The Tory Rebels could not even muster enough votes for a “No Confidence” vote in Theresa May’s leadership.
- The DUP believe that they have been sold down the river by Theresa May. The DUP in an interesting move did say under NO circumstances would they align with the Jeremy Corbyn Labour Party.
They are all however united on one thing. They do NOT want Theresa May’s BREXIT deal, which by all accounts will fail by over 100 votes. It may be closer than that on the day but circa.100 votes are the quoted number being handed around at the moment.
At the end of the day expect 40 – 50, and this number allows for some interesting options on the vote tally, which I note later on in the blog.
You must remember people will say a firm NO to the media but on the day vote yes. It’s like the TRUMP in the U.S., nobody really admits that they vote for him, BUT... there he is!
Various MP’s offer the: -
- The NORWAY deal
- The CANADA +++ deal.
- A walk away 100% from the EUROPEAN UNION.
The problem with deals is that even though it has been two years since the BREXIT referendum took place, not one party, not one pressure group has got enough votes to have an alternative motion move through the House of Commons without a similar failure in votes to pass as the Theresa May BREXIT deal. Sad but true. The intransigence of politics has won once again.
Looking at the FX opportunities...
So, UK politics enters a very uncertain period. At the time of writing this blog, the meaningful vote is due Tuesday 11thDecember at 7PM (UK) and there are a number of potential outcomes in my opinion.
Initially, I was of the opinion that GBP/USD could maybe drop to 1.1000. However, I think that the Dominic Grieve (MP Conservative, Beaconsfield) amendment that allows for more MP debates should the May deal be voted down has protected cable a little.
Here are my thoughts: -
- MAY’S BREXIT DEAL REJECTED:
I think she will then perhaps look to a second referendum and not an election. Give the vote to the people.
GBP = Positive.
- MAY’S BREXIT DEAL REJECTED:
She dives into proposing the NORWAY deal (EEA approach).
This is a softer BREXIT deal, it will please more people in parliament but NOT BREXITEERS. It has ties with the EU and involves freedom of movement and financial contributions. But from Theresa May’s perspective it has additional votes to her plan that potentially would take it over the finish line.
The markets would love this option.
GBP = Positive.
- MAY’S BREXIT DEAL PASSES:
GBP = Positive.
- MAY’S BREXIT DEAL REJECTED:
She calls a general election.
GBP = Negative... I would think, difficult to be 100%. I think that the market fear of a Labour victory would send markets into an initial tailspin.
- MAY’S BREXIT DEAL REJECTED:
GBP = Anyone’s guess.
GBP positive in my opinion sees the GBP/USD spiking through 1.3300 in fairly quick order then the 1.4000 level would be my next objective in the medium to long-term.
Those are my thoughts. Had Dominic Grieve not had his amendment in the mix, I feel matters could be a lot worse than what they might be and initially there will be frantic volatility.
Who knows what will happen. All I can say is be careful.
In other FX news....
Uncertainty rules still in the U.S. with regards to the CHINA / U.S. trade deal. TRUMP does his usual twitter stuff of all things are great, fantastic deals ahead, everything is just great, great relationship, wonderful people, they love me stuff.
The algorithms buy it initially but then comes the truth and the U.S. markets go on a “Helter-Skelter” ride. By now shouldn’t TRUMP be blaming himself for the market uncertainty and volatility?
I do not know what drives this character of a man to post tweets based upon his twisted and perverted versions of the truth. Zero facts, pure fiction at times, does he post his dreams of what actually took place in meetings?
Only God knows what his reasons are, it is totally bizarre. I struggle to get an understanding of this man’s mindset.
As you may be aware in 2019, I am making changes to my subscription service THE WEEKLY FX PREMIUM. I wanted to provide as recently promised some detailed reasons behind my changes in direction.
THE WEEKLY FX PREMIUM
In 2014, I launched the PREMIUM SERVICE, which was based around my trades that I was posting to my “WEEKLY FX DRIVE THRU” blog each weekend.
The PREMIUM SERVICE was changed to the WEEKLY FX PREMIUM in Q1 2018, as I decided to re-brand myself for the future, the name change being the initial change.
Just to confirm, The WEEKLY FX PREMIUM is a Forex Subscription service that provides subscribers with not just the trades that I am looking at but also my market commentary (examples below). I provide subscribers the details of the trades that I am looking at and it is up to subscribers whether or not they want to follow the trade or not.
In 2019, the evolution of my subscription service continues. For several reasons the main being that the FX market has once again, in my opinion, changed its focus. I now see more reliance on news flow driving price action, plus one cannot rule out the growth of algorithmic trading. This has meant that to really be effective in the FX market, more patience is required to wait for trades to slot into place, especially trades with a shorter-term horizon. Economic data has in my opinion taken a step back from having a meaningful influence in the shorter -term.
This change has resulted in me changing my focus to longer-term trading only. The market noise associated with day and swing trading, in the short-term, is just no longer of interest to me and the FUNDAMENTAL, MACRO, LONGER-TERM POSITION TRADING is where I want to be focused moving forward.
It's a big change for me and a very focused direction for the WEEKLY FX PREMIUM.
I am at the outset a FUNDAMENTAL trader first and then technical. I use the alignment of technical set ups with my FUNDAMENTAL views to give me my TRADE SET ups. From my perspective, trading Forex is all about repetition. In very basic terms you sell “RIPS” and buy “DIPS”. The key to making it all work is selecting the “High Probability” trades that are contained on every trading chart.
Whilst, I cannot 100% guarantee that subscribers will make money from my suggested trades, the WEEKLY FX PREMIUM has over a 4-year track record of profitable performances. Think about it, I do not trade to lose money!
The WEEKLY FX PREMIUM is open to all traders whether new, intermediate or experienced regardless of the size of your investment in the Forex market.
I have a very straightforward set of objectives each year: -
- 10,000 net profitable pips.
- 75% of my trades profitable and 25% loss making trades.
- Goal to increase my average pips return per trade from the current c.20 pips to c.50 pips when only POSITION TRADES are undertaken.
My subscriber area website contains a full EDUCATION section to support a trader’s day to day needs and requirements. For those who subscribe at PLATINUM STATUS, they also have the option, if they want it, of 1-on-1 market review sessions each month via SKYPE or FaceTime.
How does it all work?
As soon as I see a trade set up or a trade that I want to trade, I send out a tweet via my WEEKLY FX PREMIUM subscribers only secure Twitter account @weeklyfxpremium. This tweet contains the entry and potential exit of the trade plus the RISK % that I am attaching to the trade plus a supporting trade chart. In addition to the tweet I also email an excel spreadsheet with the trading chart once again and this provides more background and my thoughts to the trade.
1. FX - FORWARDS, BACKWARDS & SIDEWAYS:
1.1. THIS WEEK’S ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
1.2. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
1.3. USD INDEX (DXY) OVERVIEW – MY THOUGHTS:
The Daily DXY chart is below.
This week for a change, I have added my comments to DAILY DXY chart below.
1.4. USD MAJORS - TRADING CHARTS and MY THOUGHTS:
The monthly chart below shows that the EUR/USD is in a down sloping channel. The inverted Head and Shoulders from last week never materialized. The balance of the pattern just took too long.
I am now looking at a nice triangle pattern that once broken should yield some pips. The question is of course... a downside or upside breakout. Right now, the money must be heavily weighted to an upside break. I am still looking at the trading range inside my channel of 1.1216 to 1.1460. Once we see these levels taken then, I will be more interested in trading the EUR/USD.
There is so much in the background that can affect price with this pair; CHINA TRADE, ITALIAN BUDGET, BREXIT and the FED to name but 4 geopolitical events.
I would be cautious for now with this pair until we have news upon which to base our trades.
My range from last week remains in place; 1.2660 to 1.3300.
The big day is this Tuesday with the House of Commons meaningful BREXIT vote at 7PM UK time.
Who would have thought that this pair following the G20 would have fallen from 0.7400 to 0.7200? We never even got to test the 200 DAY SMA.
This pair looks weak. There is no AUD high beta news this coming week, so this pair will float according to CHINA news in my opinion and that includes TRUMP tweets... God help it!
We reached 0.6970, just shy of 0.7000 and then failed. The move higher was on the initial move following the G20 the fall back was on the fact that TRUMP’s tweets were as usual perverted with commentary not based on facts.
Right now, the 200 DAY SMA is acting as support and break through this indicator sets up a move much lower towards 0.6800 once again.
I lost $$$ on this pair last week. I exited shorts too early and took losses that I could have halved had I waited until after Fridays Jobs data which was a blow out from Canada (94,000 new jobs and the job rate falling by 0.2%).
Closing below 1.3340 in my opinion makes this pair BEARISH moving forward. I will be looking to add back short positions.
I see a trading range of 1.2925 to 1.3450 now being the levels to watch moving forward.
We are ranging for now, from 0.9850 to 1.0010.
There is a SNB Libor Rate, Policy Statement and Press Conference this week. I am not expecting anything new but maybe some numbers will give us direction vis-à-vis the EUR/CHF, which appears to be the only CHF cross that concerns the SNB.
Well, I went short and exited as we bounced off support. It looks to me that this pair is ready to move lower. I am a little concerned that despite the equity market volatility the JPY hasn’t really reacted the way it would usually do, and this was the main reason I removed my short for a mere 20 pips profit!
It appears to be tracking U.S. treasuries and nothing else at the moment. This pair does do its own thing and for me to be a happy trader it has to remain in character and trade normal.
For now, I am sidelined but it is on my RADAR.
2. THE WEEKLY FX PREMIUM TRADING SUMMARY:
2.1. WEEKLY FX PREMIUM PERFORMANCE:
December 2018 to date: 192 net profitable pips
2018 to date: 13,909 net profitable pips.
2.2. WEEKLY FX PREMIUM PERFORMANCE SUMMARY:
(Incorporating the last 5 completed WEEKLY FX PREMIUM TRADES)
2.3. SOME OF THE BENEFITS OF SUBSCRIBING:
2.4. WEEKLY FX PREMIUM SUBSCRIPTION COSTS:
SILVER: 3 months (10 weeks) = CAD350.00
GOLD: 6 months (20 weeks) = CAD$600.00
PLATINUM: 12 months (40 weeks) = CAD$900.00
(Platinum renewal = CAD$750.00)
There is currently a “PROMOTION” in place, to view the promotion you will find it on my home page under the HISTORY / PERFORMANCE TAB.
Go to my website www.weeklyfxdrivethru.comfor more details of all the subscription options under the “SUBSCRIBE TAB.
3. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
4. THE FINAL SHOT:
Nothing more to add here, I have said enough except,
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
The Pip Accumulator
BLOG VERSION: #304 FREE NEWSLETTER
DATE: 9th December 2018